What Should We Make of the Dilnot Report?

An e-mail conversation yesterday with a colleague prompted me to think about how unions should respond to the report of the Dilnot Commission. It’s a type of problem we often face – the Dilnot report recommendations would definitely be an improvement on current arrangements, but they don’t go anywhere near as far as we’d like and there’s a couple of points most trades unionists will really dislike.

Do we welcome the real improvements? Even if this means giving up on the hope of a genuine National Care Service?

It’s worth starting off with what can be welcomed without reservation, and there are five substantial improvements in the report:

It calls for much more money to be spent on social care for the elderly over the coming years. At every meeting where I’ve seen Andrew Dilnot speak on this subject he’s insisted on this as his first point. He can’t require the government to spend more, but I do think he has made it plain that this has to be the starting point for reform.

It calls for free care for those who become disabled before 40, with the amount they have to contribute rising in steps after that.

The report underlines the need for a single national standard for assessment of eligibility. This is a point that people who are new to the issue sometimes miss; one of the current system’s problems is that every Social Services authority has its own rules. This makes it impossible for disabled and elderly people and carers to move from part of the country to another and means that we have a scandalous “postcode lottery” that means that people in similar circumstances are treated drastically differently according to where they live. This is a problem that can only be dealt with by national rules on who is entitled to what.

It proposes a much fairer means-test. At present, if you have assets of more than £23,250 you don’t qualify for means-tested support – the report recommends increasing this to £100,000.

The report rules out paying for social care by scrapping universal disability benefits (something that has been floated in the past).

These are all significant improvements, but the key recommendation is one where trades unionists will have a more mixed response: a ‘cap’ on the amount individuals have to contribute to their care over their lifetimes. At present, there is no limit – you pay your care costs until your assets are reduced to the point where you pass the means-test. The report recommends setting the cap between £25,000 and £50,000 and says that £35,000 would be fair.

Now, the cap would undoubtedly be an improvement: people who qualify for means-tested provision would be no worse off whilst everyone else would no longer face the fear of losing most of their assets.

It’s ironic that we call it social care but we still rely on a mix of harshly means-tested free care for the poor, luxury for the rich and “fingers-crossed, it won’t happen to me” for everyone else. As Andrew Dilnot pointed out at the launch of his report, it’s the one area of the welfare state where we still rely on the 1948 National Assistance Act. It’s as if National Insurance – the other half of the Beveridge reforms – had never happened. Or, to put it another way, we’re in the same position as the USA is when it comes to health care – there is free provision if you’re destitute but for almost everyone else, there’s the fear that if one day you need this service then destitution is where you’re headed.

That’s why I don’t agree with an argument you sometimes hear on the Left:

I don’t see why it’s the welfare state’s job to protect the housing capital of the middle classes.

But guaranteeing that a common social risk won’t destroy your savings or drastically reduce your standard of living is exactly what social security is all about. Yes, we also want social assistance, we want to prevent and ameliorate poverty, but the welfare state is only going to be sustainable and popular if it offers something for everyone.

That’s the strong case for the cap – and why I’m sure it would be an improvement.

But the “NHS model” would be even better. [Full disclosure: I’m a long-term supporter of a National Care Service, free at point of use and funded from general taxation. I worked on the TUC submission to the Dilnot Commission and the work we did on that submission and in response to the last government’s consultations reflect my personal views.]

The problem with the cap is that people will have to find a way to meet the £35,000. Many people’s assets – and where a couple both have care needs their joint cap will be £70,000. And that won’t be the end of it – one of the less reported recommendations is that people in residential care will have to pay up to £10,000 a year in “hotel” costs – board and lodging.

So there will be a large group of mainly lower income people still facing the risk of destitution.

If they want to avoid that the Commission’s report argues that they can take out insurance. It also argues that the cap, by limiting individuals’ liability, therefore limits insurers’ liability too, and this will help create a market for care insurance that does not exist at the moment.

But this is where the case for the NHS model is especially strong. For one thing, Southern Cross should have taught us that care and profits don’t mix well. More importantly, there’s the social divisiveness of relying on private insurance – it’s very nature means that the availability and price of cover is related to your risk profile – there will be higher premiums for women, disabled people, older people and possibly also for people with jobs that could cause health problems. Some people in these groups may find it impossible to get cover at all. Even where premiums are the same, poorer people and people with high debts are likely to find it impossible to pay these premiums.

The Commission’s own opinion polling revealed that free social care is popular with the general public. They vote for other funding methods only when battered into submission by researchers telling them it isn’t on offer.

On the other hand, if we simply welcome the report as just what everyone’s been waiting for we would probably be saying goodbye to the hope of a National Care Service.

Perhaps we should welcome the strengths of the report – the calls for extra money, free care for people under retirement age, a single national standard for assessment and eligibility, a fairer means-test and defence of universal disability benefits.

And, at the same time we should very strongly argue against any notion of a special tax for pensioners – the extra costs of the Dilnot plan should be met from general taxation, which should be increased if necessary. I think this will resonate with older people and tend to make the call for free care seem reasonable.

We should argue that free care is better than a cap – which does, however, have one advantage I haven’t mentioned so far: it can be reduced and eventually abolished.

The Dilnot plan offers a basis for gradual progress towards the NHS model, by continually reducing the level of the cap. That approach positions us as the most progressive end of a broad range of organisations challenging the government to implement Dilnot. It would also give unions a distinctive and popular position for campaigning, should Dilnot be implemented and put us in a strong position for arguing against any attempt by the government to set the cap at a higher level than Dilnot calls for.

I mentioned earlier my view that, on social care, the UK is in much the same position as the US is in relation to health care. I think trades unionists here face a similar dilemma to US trades unionists in responding to Presdident Obama’s health care proposals: the plan with the greatest chance of success falls a long way short of our ideal, should we denounce it or treat it as the start of a reform journey? If I were American I’d have chosen to support ‘Obamacare’.

I have a great deal of respect for the National Pensioners’ Convention – it’s pretty plain that my views are much the same as theirs on policy issues. But I think we’ll have more influence by treating this report as a “good start” than as a “wasted opportunity.”

Written by Richard Exell

I am the TUC’s Senior Policy Officer covering social security, tax credits and labour market issues, including the debates about the European social model and labour market flexibility. I also represent the TUC on the Industrial Injuries Advisory C…

One Response to What Should We Make of the Dilnot Report?

Many may believe from the headlines that the Dilnot report has generated that the Government will pick up all care costs once a self-funder1 has paid the first £35,000 of their own social care costs. This is simply not correct.

Under Dilnot’s proposals the Government will only meet social care costs and not hotel costs and general living costs. This is an essential point to understand as hotel and general living costs are typically two or three times as much as personal care and nursing costs taken together.

This means that, for just over 2 years, self-funders will have to meet all their care costs themselves. According to research someone with care costs of £1,000 a week will pay £208,000 under the current system if they live for 4 years. Under the proposed new system, they would pay £189,000 over 4 years, a saving of only around 9%.

These proposals will not come into effect before 2013 at the very earliest with indications being that a further substantial period of consultation is likely to take place, which might result in further changes to the proposals.

The key message for any self-funder is to get properly qualified financial advice as soon as possible.

http://www.payingforcare.co.uk is a consumer friendly website which provides visitors with information on all aspects of long term care funding for older people. Visitors can get immediate answers to their questions by using our live chat service, manned by specialist cost-of-care advisers.

Feedback from payingforcare.co.uk visitors:
“It’s great being able to get advice direct like this. Especially when I’m feeling anxious. Thank you.” Melrose 13.6.11 “makes you feel as though you are not alone” Alan 14.6.11 “give yourself a pat on the back because when you get to our age you don’t know which way to turn.” Maureen 20.6.11 “fantastic service thank you” Jan, Age UK 22.6.11 “A great service – I wish I’d found you sooner” Carolyn 27.6.11 “very helpful at a very difficult time” Lesley 28.6.11 “How does one improve on excellent? Please continue this great work” Mahomed, Advocacy Plus 28.6.11 “Incredibly helpful, Nicky took the time to explain things well so as to make sure all was understood, explained other eventualities and generally made helped make sense of a tricky financial area, would definitely use this service again and would recommend.” Jay 5.7.11

1 Self-funders are people who currently have assets, including property, exceeding £23,250 in England and who have to pay for their care. This threshold will rise to £100,000 if Dilnot’s proposals are accepted.

2 OECD report: Help Wanted? Providing and Paying for Long Term Care, June 2011 and using typical quality care home costs in the South of England of £1,000 per week.

3 Partnership Press Release – 1 August 2011 – Following Dilnot – Self Payers still pay 90% of all their care costs in many quality care homes costing them nearly £200,000 if they live for 4 years – warns Partnership.